Running your own business is rewarding — you’re your own boss, your hours are your own (sort of), and your income is tied directly to the work you put in. But what happens when you can’t work? If you’re a sole trader, tradie, or self-employed business owner, you already know there’s no sick leave, holiday pay, or backup plan — unless you make one. That’s where Income Protection Insurance becomes not just a smart option, but an essential part of your financial toolkit.
With EOFY just around the corner, now is the perfect time to review how income protection could help—not just for peace of mind but potentially for a valuable tax deduction, too.
What Is Income Protection Insurance?
Income protection insurance provides a regular monthly payment if you can’t work due to illness or injury. It typically covers up to 70% of your pre-tax income and kicks in after a waiting period, supporting you financially while you get back on your feet.
It’s not about worst-case scenarios. It’s about peace of mind when something unexpected interrupts your earning ability. Because if you are the business, then your income is the engine, and if it stops, everything else does too.
Why It Matters for Sole Traders and Tradies
As a sole trader or contractor, you’ve probably experienced the reality that you don’t get paid if you don’t work. Unlike salaried employees, you don’t have the luxury of paid leave or employer-sponsored insurance.
If you’re a:
- Tradie on the tools every day
- Freelancer juggling jobs and invoices
- Small business owner working solo or with a lean team
An injury, illness, or even something like back strain or burnout could mean weeks (or months) off the tools. Income protection insurance keeps the money coming in while you focus on recovery, instead of scrambling to pay bills or dipping into savings.
How It Works
- Waiting Period: Choose how soon payments start after you cannot work (e.g., 14, 30, or 90 days).
- Benefit Period: Decide how long payments continue (commonly 2 years, 5 years, or up to age 65).
- Premiums: Here’s the bonus — income protection premiums are often tax-deductible if the policy is held outside of super and structured correctly. It’s a powerful way to protect and reduce your taxable income.
- Flexibility: You can tailor the policy to fit your working pattern, income fluctuations, and risk level.
EOFY Reminder: Claim It Back
In the lead-up to June 30, many business owners are looking for legitimate ways to reduce their tax liability, and income protection is one of the most innovative ways.
By reviewing or setting up a policy now, you may be able to:
- Claim the premiums as a deduction in this financial year
- Improve your cash flow protection heading into the new year
- Ensure you’re not leaving a crucial gap in your risk planning
EOFY is a chance to take stock, get strategic, and ensure you’re not missing opportunities to protect your income and lower your tax.
Tailored Support from MBC and Greg Thornton
At MBC Wealth, we work with a diverse range of clients, from established business owners to professionals planning for long-term wealth. But when it comes to income protection insurance, it’s sole traders, tradies, and self-employed business owners often have the most to gain.
With no employer leave entitlements, limited financial safety nets, and an income that depends entirely on your ability to work, this group is most exposed if something goes wrong. That’s why income protection is such a smart, strategic move — it bridges the gap between your business and personal finances and helps safeguard your lifestyle.
To help you make the right call, we invite you to book a free consultation with Greg Thornton, our Certified Financial Planner from MBC Wealth. Greg will:
- Review your current financial setup
- Explore tailored options for income protection
- Help you structure your cover for potential EOFY tax benefits
- Align your insurance with broader wealth-building goals
Whether on the tools, behind a desk, or running a growing business, Greg’s here to help you protect what you’ve built — and plan for what’s next.
You Work Hard. Let’s Make Sure You’re Covered.
Being a sole trader takes guts. But it shouldn’t come at the expense of security. Income protection is not about fear — it’s about freedom. Freedom to recover without stress. Freedom to protect your family’s lifestyle. Freedom to focus on what matters most.
Not a sole trader? No worries, you could still benefit from this kind of insurance.
Book a chat with Greg Thornton from MBC Wealth today.
Secure your income, explore tax benefits before June 30, and take the first step toward peace of mind. Contact Us Now or call the MBC office to schedule your consultation.
